The Trump Administration has signaled it intends to reconsider the previously enjoined 2024 rule that would have increased the minimum salary threshold required for an employee to be exempt from overtime under the Executive, Administrative, and Professional exemption (“Professional Exemption”) and the Highly Compensated Employee exemption (“HCE Exemption”). This rule, issued in the final year
Pay Me Now, or Pay Me Later? Wages Paid for Anticipated Overtime are Excludable from Employees’ Regular Rate
The Department of Labor (“DOL”) released an opinion letter addressing whether certain overtime payments based on an expected number of hours may be credited towards the amount of overtime pay owed under the Fair Labor Standards Act (“FLSA”) and whether such overtime payments are excludable from the regular rate. The answer to both questions is yes.
The inquiry came from a business that provides in-home care services on a live-in basis or for shifts of 24 hours or more. The employer pays an hourly rate plus overtime based on anticipated overtime hours. The caregivers typically work five days a week for 120 or more hours. Given the nature of the caregivers’ work, the employer found it difficult to track which hours the caregivers were actually working. The employer therefore treats the employees as performing compensable work for the entire extended shift, minus 8 hours allotted for sleeping and meal breaks. If a caregiver has any work-related interruptions to meal or sleep periods, the caregiver is to track those hours and they are counted as compensable time. If a caregiver works more than anticipated, then the employer supplements the prepaid compensation at a rate of 1.5 times the caregiver’s hourly rate for each unanticipated hour of work over 40 hours.Continue Reading Pay Me Now, or Pay Me Later? Wages Paid for Anticipated Overtime are Excludable from Employees’ Regular Rate
DOL’s Joint Employer Test Ruled Illegal
On September 8, 2020, the United States District Court for the Southern District of New York struck down portions of a January 2020 Final Rule issued by the Department of Labor. The Final Rule provided a new test for determining whether an entity is a joint employer with another entity under the Fair Labor Standards Act (FLSA). The Final Rule, which became effective in March of 2020, severely limited the situations in which an entity can be considered a joint employer and held liable for violations of the FLSA in a “vertical” joint employment relationship. A vertical joint employment relationship is the variety of joint employment that exists when there is some sort of intermediary, like a staffing firm, PLA, or temp agency between the employee and the employer that ultimately benefits from the employee’s work. We discussed “horizontal” joint employment in a prior post.
Several states, including Illinois, filed suit challenging the Final Rule’s legality with respect to the Final Rule’s changes to the vertical joint employment determination. Historically, courts and the DOL have made clear that control over an individual’s employment is not the dispositive factor in determining whether an entity is a joint employer with another entity. Instead, whether a joint employment relationship exists depends upon whether the employee in question is economically dependent upon the potential joint employer.Continue Reading DOL’s Joint Employer Test Ruled Illegal
DOL Broadly Defines When a Summer Camp or Program is a Child’s Place of Care for FFCRA Leave
In Field Assistance Bulletin No. 2020-4, issued June 26, 2020, the United States Department of Labor, Wage and Hour Division, recognized a number of ways an employee can establish eligibility for Family First Coronavirus Response Act (FFCRA) leave based on the closure of a summer camp or program that the employee claims would have been the place of care for the employee’s child over the summer. In addition to proof of actual enrollment or application to a camp or program, if an employee’s child attended a camp or program in the summer of 2018 or 2019 and the child remains eligible for the camp or program for Summer 2020, that may be sufficient. Likewise, if an employee’s child is accepted to a waitlist pending the reopening of a camp or program or the reopening of the camp or program’s registration process, that, too, may be sufficient. Although the DOL states that mere interest in a summer camp or program is not enough, this broad interpretation opens the door to many new requests for FFCRA leave for employees. Employers should continue to obtain as much information as possible from an employee regarding the reasons the employee considers a summer camp or program to be the provider for the employee’s child. Consider consulting with legal counsel if you receive a request where there is a question as to whether the provider is in fact the child’s provider, including requests related to a summer camp for which no application, acceptance, attendance, or enrollment has occurred.
Continue Reading DOL Broadly Defines When a Summer Camp or Program is a Child’s Place of Care for FFCRA Leave
DOL Withdraws Industry Lists from its Retail or Service Establishment Exemption Interpretative Rule
I believe most would agree, the Department of Labor’s (DOL) interpretative guidance typically provides useful insight to employers navigating often tricky wage and hour laws. This was not the case with the DOL’s decades-old guidance regarding whether an employer was a “retail or service establishment” and could claim an overtime exemption for certain employees paid on commission under Section 7(i) of the Fair Labor Standards Act (FLSA). In its interpretative guidance, the DOL created lists of industries that were either not recognized as retail establishments, or could possibly be recognized as retail establishments. In an action that should be mostly applauded by employers, the DOL recently issued a final rule withdrawing these particularly unhelpful “industry lists” and will instead evaluate every industry according to its regulations.
Continue Reading DOL Withdraws Industry Lists from its Retail or Service Establishment Exemption Interpretative Rule
DOL Green Lights Bonuses for Employees with Fluctuating Work Schedules
The U.S. Department of Labor (DOL) has issued a final rule under the Fair Labor Standards Act (FLSA) expressly authorizing employers to offer bonuses, hazard pay, and other premiums to employees whose hours, and regular rate of pay, vary from week to week.
The final rule revises 29 CFR §778.114, which is the DOL regulation that specifies how overtime is to be computed for salaried, non-exempt employees who work a fluctuating workweek. The new rule clarifies that bonuses, premium payments, commissions, and hazard pay on top of fixed salaries are compatible with the fluctuating workweek method of compensation and that employers must include such variable compensation when calculating an employee’s regular rate for overtime purposes. The final rule includes example calculations to illustrate how to factor in such payments.Continue Reading DOL Green Lights Bonuses for Employees with Fluctuating Work Schedules
DOL Proposes Rule to Make Bonus and Incentive Pay Compatible With Fluctuating Workweek
On November 5, 2019, the U.S. Department of Labor published a proposed rule that would make it easier for some employers to apply the “Fluctuating Workweek” method of calculating overtime pay for certain non-exempt employees.
Background
For those not familiar with the concept, the fluctuating workweek method is one way of calculating overtime pay for non-exempt employees who are paid a fixed salary but whose hours fluctuate from week to week. The fluctuating workweek method can be extremely advantageous for employers because it allows an employer to pay a non-exempt employee a fixed salary covering all of the employee’s straight-time work, regardless of the number of hours worked. If an employee works overtime, they still receive premium pay for each hour worked, but the rate is one-half of the employee’s regular rate instead of 1.5 times the regular rate. For a full explanation of this method and the conditions under which it can be used, check out our earlier explanation here.
Under the current rules, several conditions must be met before an employer can use the fluctuating workweek method. These include:Continue Reading DOL Proposes Rule to Make Bonus and Incentive Pay Compatible With Fluctuating Workweek
DOL Proposes $35,308 Minimum Salary For Exempt Employees
Earlier today (March 7, 2019), the U.S. Department of Labor announced new proposed regulations (.pdf) that would increase the minimum salary for employees to qualify for the Executive, Administrative, and Professional exemptions under the Fair Labor Standards Act to $679 per week, equivalent to $35,308 per year. This is an increase from the current minimum
Employees Are Not Entitled to Compensation for FMLA Covered Breaks
As mentioned previously here last summer, the U.S. Department of Labor’s Wage & Hour Division has brought back the Opinion Letter, the process previously used by attorneys and HR professionals to obtain guidance from the WHD. The DOL dropped the practice in 2010, but it has since been reinstated.
Yesterday, on April 12, 2018, the
What to Make of the DOL’S PAID Program
You may have read about the U.S. Department of Labor’s new “Payroll Audit Independent Determination” or “PAID’’ pilot program. Under this program, the DOL invites employers to voluntarily audit their payroll practices and disclose any “non-compliant practices” to the DOL. The DOL then reviews the employer’s records and calculations of what is owed to employees,